Brazilian Revolt Claims Second Life as Violence Erupts

Protesters march during demonstrations in downtown Rio de Janeiro, Brazil. Photographer: Dado Galdieri/Bloomberg

June 21 (Bloomberg) -- Brazil’s swelling street rebellion
claimed its second fatality in the largest and most violent
protests yet, as 1 million demonstrators rallied for better
public services and an end to corruption.

Marches took place in hundreds of cities across Brazil last
night in what began as a peaceful protest. Violence later
erupted with police battling mobs trying to storm the Foreign
Ministry in Brasilia and Rio de Janeiro’s city hall.

In the northern city of Belem, a 54-year-old street cleaner
died today after having a heart attack during the protests
there, local health officials said. Yesterday an 18-year-old was
killed when a vehicle accelerated into a crowd in the city of
Ribeirao Preto, the military police said. The Free Fare Movement
that helped organize protests in Sao Paulo said today it
wouldn’t call new protests for now.

President Dilma Rousseff, who has been struggling to get in
front of the mass movement, met with cabinet members today to
discuss emergency measures to help quell violence and prepare
proposals on education, health and other demands of protesters,
a government official aware of her agenda said.

The movement triggered by an increase in bus fares this
month has spread amid a groundswell of discontent among Brazil’s
middle class. While faster economic growth helped lift 40
million people out of poverty over the past decade, a recent
slowdown and faster inflation threaten to erode social gains.

Market Sell-Off

“The people have the grit to continue,” Natalia Lustoza,
a 20-year-old college student, said in Brasilia. “The protests
will only end when we see politicians solving our problems.”

The unrest comes less than a month after thousands of
people turned out on the streets of Turkey, as anger over the
redevelopment of a park turned into a broader protest against
the government.

The crisis in Brazil comes as the nation’s stocks, bonds
and currency are being battered by an emerging markets sell-off
and the economy struggles to recover from its second-worst
performance in 13 years. The world’s second-biggest emerging
market will grow 2.49 percent this year after expanding 0.9
percent in 2012, according to analysts polled by the central
bank.

The real gained 0.6 percent at 3:32 p.m. local time to
2.2439 per dollar after falling to a four-year low yesterday.
The currency is the worst-performing this month among 24
emerging markets tracked by Bloomberg.

The Ibovespa stock index fell 2.3 percent, heading for its
fourth straight weekly drop, as investors abandon emerging
markets on expectations the Federal Reserve will begin tapering
a bond-buying program that has flooded emerging markets with
cash in recent years. The index has slid 23 percent this year,
the worst performer among the world’s 20 biggest equity markets.

Yields Climb

Brazil’s annual inflation through mid-June accelerated to
6.67 percent, its fastest pace since November 2011. Urban bus
fares rose 1.83 percent in the month through mid-June and made
the greatest impact on inflation of all components.

The largest demonstrations last night were in Rio and Sao
Paulo, where authorities this week revoked a 20 centavo (9 cent)
increase in bus fares that became a rallying cry for frustration
over the quality and cost of public services. Yet protesters,
who largely organized via social networks, marched in 388 cities
across the nation of 195 million inhabitants, according to
Agencia Estado.

Canceled Visit

“These protests can’t be calmed just with talk,” Oded
Grajew, a former businessman who in 2002 helped elect Rousseff’s
mentor and predecessor, Luiz Inacio Lula da Silva, said in a
phone interview from Paris. “The government needs to come up
with concrete answers for this movement not to spin further out
of control.”

Rousseff yesterday canceled a state visit to Japan set to
begin next week to manage the crisis. Since being jeered by
soccer fans June 15 at the opening match of the Confederations
Cup, Rousseff, a member of the Marxist underground that battled
Brazil’s 1964-1985 military dictatorship, has vowed to listen to
what she called “the voices on the street.”

The protests are the largest since those in 1992 that
pressed for the impeachment of Fernando Collor, the first
directly-elected president following the dictatorship. While the
movement may lose steam with its initial and unifying demand
met, the situation will remain tense between now and next year’s
presidential election, said Joao Augusto de Castro Neves, an
analyst at political risk consultancy Eurasia Group.

‘Quality of Life’

“More and more the middle class is focusing on the quality
of life agenda,” Castro Neves said in a phone interview from
Washington. “They don’t just want a cellphone, they need the
phones to work well. They don’t just want cars, they want cars
that can ride on the street without traffic jams or potholes.”

The approval rating of Rousseff’s government has fallen
eight percentage points to 55 percent since March, mostly over
growing discontent with quickening inflation, according to an
Ibope poll published this week.

Magnifying protesters’ demand is Brazil’s hosting of the
Confederations Cup. The two-week tournament is a warm-up for
next year’s World Cup, whose price tag of 30 billion reais has
also drawn ire in a nation where 21 percent of the population
still lives below the poverty line.

World Cup

At a match last night between Spain and Tahiti, fans inside
Rio’s Maracana stadium held up a banner reading “We Don’t Need
a World Cup.” Another, displaying the image of Rousseff in her
days as a militant, vowed “Our Fight Has Not Finished.”

FIFA staff at the stadium in Salvador yesterday were told
to wait and travel together in a specially organized bus because
of the protests there, according to a FIFA official at the
stadium who isn’t authorized to speak to the press. They usually
share a fleet of seven or eight cars to travel between their
hotel and the Fonte Nova arena.

Almost 1 million people marched in 27 capital cities, Folha
reported, citing police estimates in each state. That’s four
times the estimated turnout on June 18, which was the previous
record for the growing movement.

Rio Violence

In Rio, O Globo newspaper estimated 300,000 people turned
out yesterday. While the demonstrations there were largely
peaceful, a group of stone-throwing protesters who set upon city
hall were met by cavalry and foot soldiers firing rubber
bullets. More than 60 people were injured, including eight
police officers, Mayor Eduardo Paes told reporters today. In
Brasilia, more than 120 were hurt, according to Globo TV.

Sergio Cabral, governor of Rio de Janeiro state, said
police acted appropriately given the tension generated by some
protesters’ use of violence. Any reports of excessive use of
force will be investigated, he said.

A leader of the Free Pass Movement, Rafael Siqueira, said
today the group was calling off new protests in Sao Paulo to
reflect on how to proceed, and because other groups are taking
advantage of the marches to carry out acts of violence.

In Ribeirao Preto, a city in the prosperous farm belt
surrounding Sao Paulo, a Land Rover mowed into a small crowd,
injuring three and killing Marcos Delefrate, who became the
first victim of the student-led movement, Folha said.

“We’ve taken the first step,” said Fabiean Jambeiro, a
25-year-old human resources professional whose parents only
obtained a middle-school education. “Now that everyone is in
the streets we’re going to achieve more.”